A common misconception about franchises is that anyone can just buy one. If you have enough money, you can own a Jimmy John’s, a Dunkin’ Donuts, or a Planet Fitness. Yet, brands like these turn down people’s money all the time. And, in fact, any franchise I would want to be a part of would do the same, even at the sacrifice of brand growth (which is one of the reasons to join a franchise in the first place).
The goal for a franchise is not simply to grow. The goal is to grow with the right people as franchise owners.
To understand how to land yourself an approval, it’s helpful to understand some of the common reasons people get disqualified. Here are the red flags that make franchisors think twice about approving you to buy a franchise:
- Singular Focus on Money: Over the past 15 years, I’ve talked to thousands of people that are interested in owning a franchise, and not one single person wanted to own their own business simply for the fun of it. Franchisors know you want to make money and get a great return on your investment. However, there’s a lot of different franchises that can do this for you, and there’s a lot of non-franchise investments that give you that opportunity. It’s OK to want to make money with a franchise and you’d be crazy if that wasn’t a primary goal! But think about your why beyond the money, and be sure you can articulate it to the franchise team.
- Lack of Passion: This point is directly related to the first point but it’s worth reinforcing because it’s so important. Your why may include money, freedom, pride, etc. Beyond those common reasons for owning a franchise, what is it about this franchise that will get you out of bed in the morning? Maybe you love working with children, or dogs, or you’re an exercise addict. Make sure the franchisor knows this about you.
And, by the way, I’ve witnessed several people try to fake passion for a company’s mission just because they thought the investment opportunity was so strong. This will likely be sniffed out, and if it’s not, it will probably be a disaster down the road when you realize you don’t enjoy what you’re doing.
- Unwilling to Follow the Process: Franchisors have a process to follow in order to become a franchisee. This is the first indicator of whether or not you’ll be able to follow the franchisor’s systems. While it may not fall in line with exactly how you’d like to progress through learning about the franchise, you’ll likely be disqualified for trying to circumvent the process.
- Indecisiveness or Flakiness: Franchisors want people that know how to make decisions and take action. If you’ve made it all the way through the process and can’t give them a yes or no, that’s a red flag. If you commit to reviewing the FDD by next Friday and you push that timeline out repeatedly, that’s not going to give them confidence in your ability to keep your commitments when your franchise is open for business. Make sure you communicate a decision-making timeline you’re comfortable committing to, and keep that commitment. That doesn’t mean you should rush into a decision, it means you should set a realistic timeline for yourself and stick to it.
If you have a dream of owning a franchise, keep these things in mind as you start the qualification process. Know your why, follow the process, and keep your commitments. Just like a new job opportunity, there are two decision makers in a franchise sale, and both have to say yes to make it happen.